3 Property Stocks that Continue to Pay Dividends - IPL, GMT, PCT

  • Jul 17, 2020 NZST
  • Team Kalkine
3 Property Stocks that Continue to Pay Dividends - IPL, GMT, PCT

Summary

  • Amid growing concerns around the increasing number of COVID-19 cases and the ongoing tension between the world’s two biggest economies, investors seek stocks that offer stability to their portfolio.
  • Due to the pandemic’s prolonged impact, several dividend-paying companies revoked the payment of dividend. However, many did manage to provide dividend in FY2020.
  • Investore Property paid an annual cash dividend of 7.6 cents. It expects its dividend guidance for FY2021 at 7.6 cents per share which would depend on no further deterioration in economic conditions.
  • Goodman Property paid a cash distribution of 6.65 cents per unit on 18 June 2020. Under the new policy cash distributions of at least 5.3 cents to be paid in FY2021 depending on the market conditions.
  • Precinct Properties reaffirmed its FY2020 dividend of 6.30 cents per share.

During the ongoing COVID-19 pandemic, which has impacted the world economy since the turn of the year and continues to affect public health and the financial markets, many dividend-paying companies decided to either withdraw dividend payments or postpone them. The growing uncertainty prevailing in the market led to multiple businesses take this drastic step. However, some companies that have been able to provide dividend for the full year 2020. With investors unsure of what their next income source would be, companies that continue to pay dividends are likely to garner attention.

In this article, we would look at three NZX-listed property stocks which provided dividend in FY2020 despite the subdued business environment and ongoing uncertainty surrounding the present scenario.

Investore Property Limited (NZX:IPL)

Investore Property Limited invests in commercial properties including large format retail property assets.

On 3 June 2020, the Company released its FY2020 results for the full year ended 31 March 2020. FY2020 was a good year for the Company as it remained active in delivering on its strategy of targeted growth, which is highlighted in FY2019 annual report.

During the period, IPL completed, or had agreed to complete, the acquisition of five properties with a combined purchase price of NZ$147.7 million. The deal was in the Company’s strategy of targeted growth and M&A activities that enhance diversification (geographical and/or tenant portfolio).

A Glance at the financial performance highlights:

  • Net rental income increased by NZ$0.7 million to reach NZ$48.1 million.
  • Profit before other income/(expense) and income tax for the period was NZ$26.7 million, a decline of NZ$0.2 million as compared to the previous corresponding period.
  • Profit after income tax declined by NZ$9.9 million to NZ$28.6 million. The drop was due to lower revaluation movement compared to the pcp.
  • IPL announced a distributable profit after current income tax of NZ$21.1 million, up NZ$0.2 million on pcp.
  • Annual cash dividend for the period was consistent with the guidance at 7.6 cents per share.

In the year ahead, Investore Property aims to improve the portfolio and maximise returns to investors over the medium to long term. It would also monitor the impact of COVID-19, seeking to minimise the effect on Investore’s business. At the same time, it would be supporting tenants to maintain profitable, sustainable businesses. IPL would also be investing in refurbishment of stores to improve customer visit. The focus would also be on maintaining disciplined capital management to assist in the execution of the strategy.

Considering that there would be no further worsening of economic conditions due to COVID-19, the Company expects its dividend guidance for FY2021 at 7.6 cents per share.

Stock Information:

By the end of the day’s trade on 16 July 2020, IPL shares settled at NZ$1.920, down 1.03% from the previous close.

Goodman Property Trust (NZX:GMT)

Goodman Property Trust is an externally managed, listed unit trust that invests in superior industrial & business space property.

On 15 July 2020, GMT released Goodman Property Trust Annual Report 2020 Managed Investment Scheme for the full year ended 31 March 2020.

  • Statutory profit before tax stood at NZ$284.4 million (which includes the investment property valuation gains of NZ$165.8 million). This value in FY2019 was NZ$334.8 million.
  • Net tangible asset increased by 10% to 172.7 cents per unit as compared to the previous corresponding period.
  • Adjusted operating earnings before tax for the period was NZ$109.7 million.
  • Cash distributions of 6.65 cents per unit were declared by the Company and were paid on 18 June 2020.
  • Successful capital management initiative taken by the Company with $175 million of new equity raised in September and October 2019, via NZ$150 million Placement and NZ$25 million Retail Unit Offer.
  • Substantial balance sheet capacity with gearing of 18.9% and with ~NZ$400 million of available liquidity by the end of the full year.
  • The Company made further development progress with NZ$158.6 million of projects which were completed during the period, and another NZ$101 million of projects are under progress.

FY2021 Guidance and Distribution:

The strength of GMT’s rental cash flows supported by the 200+ clients that occupy the portfolio. While the economic outlook was impacted in the past couple of months, the quality of the assets, the focus on the industrial sector and low level of gearing gave confidence to the Company’s board related to the Company’s robust operating results.

If the portfolio remains to perform as per the expectations, cash earnings will be materially consistent with last year at nearly 6.2 cents per unit.

Under the new policy cash distributions of at least 5.3 cents per unit are likely to be paid in FY2021. However, it would depend that there are no further significant adverse variations in market conditions or the incidence of other unforeseen events.

Stock Information:

By the end of the day’s trade on 16 July 2020, GMT shares settled at NZ$2.145, down 1.61% from the previous close.

Precinct Properties New Zealand Limited (NZX:PCT)

Precinct Properties New Zealand Limited is the country’s only listed CBD specialist that invest in quality and A-grade commercial office property. The Company has around 300 clients from the public as well as the private sector. The Company aims at high levels of occupancy along with a long-term relationship.

On 12 June 2020, Precinct Properties released its quarterly report for the Q4 ended 30 June 2020. During the quarter, the Company experienced several challenges due to COVID-19 pandemic. However, the Company had planned and adjusted its operations to function in a safe manner under different COVID-19 alert levels as per the New Zealand government guidelines.

While uncertainty prevailed in the economy, the Company’s excellent client base, high occupancy plus long term weighted average lease term gave the confidence to meet the FY2020 dividend guidance. The Company reaffirmed its FY2020 dividend of 6.30 cents per share. The Company would declare its FY2020 results for the full year ended 30 June 2020 on 13 August 2020.

A Glance at Financial Summary:

By the end of the day’s trade on 16 July 2020, PCT shares settled at NZ$1.700, in line with the previous close.

 


Disclaimer
The website has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. The above article is NOT a solicitation or recommendation to buy, sell or hold the stock of the company (or companies) under discussion. Kalkine does not in any way endorse or recommend individuals, products or services that may be discussed on this site.

 

   
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